When Do Banks Levy Charges For Non-Maintenance Of Minimum Balance In Savings Account?

Individuals who are not interested in maintaining a minimum balance in the bank can open "Basic Savings Bank Deposit Accounts" in any of the banks. In this account, there is no requirement to maintain a minimum balance. However, the facility provided will be less when compared to a savings account.

The Reserve Bank of India (RBI) has advised that banks must intimate the customers regarding the requirement of minimum balance in savings bank account and levy of penal charges for non-maintenance of the same at the time of opening the account.

There is also a proposal to banks that instead of levying penal charges for non-maintenance of minimum balance in ordinary savings bank accounts, banks should limit services available and restore the services when the balances improve to the minimum required level.

Individuals having a savings account or current account need to maintain minimum balance in the account as per the account you hold.

Individuals who are not careful in maintaining the minimum balance in the savings account should note the following things on charges for non-maintenance of minimum balance.

Notification by SMS, E mail

If the customer fails to restore the required balance in the account after bank notifying the same through SMS, email, letter etc. in the event of a default in maintenance of minimum balance within a month from the date of the notice, penal charges will be applicable.

Charges will be recovered

If an account holder fails to maintain minimum balance within a reasonable period, which will not be less than one month from the date of the notice of shortfall, penalty amount will be recovered under intimation to the account holder.

Which means, the bank will deduct the amount from the account after intimation of the same.

Bank charges

The penalty charges to be levied by bank will be decided with the approval of Board of the bank.

Percentage of charges

The charges will be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance. A penalty structure for recovery of charges will be fixed.

Charges not exceeding average cost

Penalty charged by the bank will be such that it will be reasonable and not out of line with the average cost of providing the services.

Negative balance

Banks will ensure that the balance in the savings account will not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance.